Yesterday morning, State Monitor Judy Tripodi sent a letter to Hoboken's mayor and the entire City Council, informing them that Hoboken improperly implemented an Early Retirement Incentive (ERI) program and now will have to pay back $4.2 million to the state of New Jersey.

About a year ago, Mayor Dave Roberts introduced the early retirement program, which he said he modeled after the city of Newark, which successfully implemented a similar program.

According to Roberts, the Hoboken ERI was successful, saving the city $3 million and resulting in large numbers of City employees leaving the payroll.

But the state Department of the Treasury (Division of Pensions and Benefits) says otherwise. According to the letter, the state never authorized Hoboken to implement that retirement program and that the city now owes the state $4.2 million.

Roberts said he will "respectfully challenge" the state's determination.

"I'm not even at the point where I would agree that we made a mistake," said the mayor today. "I plan to actively defend what the city of Hoboken did."

The mayor said that, should Hoboken have to pay back the funds, he would advocate bonding for the money instead of raising taxes.

"We're not agreeing that we did anything different than the city of Newark and after we analyze this, then we will look at a number of options to repay this -- one option will be bonding, not raising taxes. Hoboken has gone through an enormous tax increase; I do not recommend raising taxes in addition that," said Roberts.

"I stand by our plan and I would hope the Council would stand by it," said Roberts.

The Hoboken City Council voted unanimously to pass the ERI when the Roberts administration first proposed it. 5th Ward Councilman Peter Cunningham said he is not sure why the state is deeming the ERI was unauthorized, but he is "outraged and disgusted" over the news.

"I'm disappointed that again something has come before us that hasn't been approved," said Cunningham today. "This was a time when the administration wanted to cut the budget but they didn't vet this or go through the proper channels ... You find out when she (Tripodi) gets in that this was done improperly."

"And it's not like Hoboken doesn't have friends in Trenton. The mayor says (our plan) looks just like Newark's, but there must have been something egregious in this for the state to say 'no,'" continued Cunningham. "There are a lot of questions to be answered on Monday."